My take-away from all that: I am not currently on recession watch in the US, but risks have increased.

China and Europe will be a drag on US growth, and inflation finally starting to tick up at a point where the Fed was beginning to ease is a bit of a conundrum. I don’t think it’ll be enough to pull the US into a recession, and the current selloff represents an opportunity. I took advantage of the rebound Thurs-Tues to sell some positions that had reached my targets. Today I’m happy that I’ll have some extra dry powder as valuations get more attractive.

Basically, don’t panic, and get excited about some good buying opportunities. But also stay data-dependent.

And thanks for the feedback on the design. Almost everyone who replied this time around said they preferred the new look, so we’ll stick with it for now.

“Kraft Heinz shares plunged to a record low after reporting that profit slipped 15% in the company’s home market. That leaves Berkshire’s 27% stake worth $8.5 billion, well below the $13.5 billion it has Kraft Heinz marked on its books.”

Markets & Investing

“Taken together, recent developments have increased the odds, in our view, that a ‘mid-cycle adjustment’ of the fed funds rate similar to the mid and late 1990s (when the Fed cut rates three times) may not suffice to stabilize growth, but that last Wednesday marked the beginning of the next major Fed easing cycle.”

“The more enthusiasm there is in the world, the harder it is to live up to people’s expectations and the easier it is to disappoint. When a stock goes from great optimism to the optimism sobering up, it’s very painful for investors. What you really want to know is how much optimism is in the price.”

“When companies invest outside their domestic markets, the most immediate risk that they are exposed to is exchange rate risk, since revenues, profits and cash flows are affected by changing exchange rates. That risk, though, is but a piece of the puzzle…”

Podcast of the Week

The guest is Chris Bloomstran, the president and chief investment officer of Semper Augustus Investments Group. Hosted by Patrick O’Shaughnessy. I learned a lot listening to how Chris thinks about Ross, Costco, Disney, Cummins, Dollar General, etc.

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